"ACC 556 Week 6 Problem (Duncan Company Solution)"..Complete Solution! Thanks

ACC 556 Week 6 Problem Cost of Goods Manufactured,Proforma Income & Balance sheet

The Duncan Company has just completed a number of budgets for the coming year. The cost of goods



manufactured schedule, the proforma income statement and the balance sheet still have to be completed.

The following information is available:

Prior year Balance Sheet:

Cash

$35,000

Accounts Payable

$98,000

Accounts Receivable

45,000

Other Current Liabilities

39,000

Materials Inventory

35,000

Income Taxes Payable

21,000

WIP Inventory

25,000

Finished Goods Inventory

32,000

Long-Term Debt

250,000

Prepaid Expenses

15,000

Plant and Equipment

450,000

Common Stock

100,000

Accumulated Depreciation

(120,000)

Retained Earnings

27,000

Other Assets

18,000

Total Assets

$535,000

Total Liab. & Equity

$535,000

Information from recent budgets for the coming year:

1. Projected sales are $1,800,000  (12,690 units)

2. Projected direct material purchases are $500,000







3. Projected direct material usage is $495,000

4. Projected direct labor expense is $400,000

5. Projected overhead is $380,000

6. Projected selling expenses are $120,000







7. Projected administrative expenses are $300,000







8. Projected cash collections are $1,785,000







9. Projected payments for materials (accounts payable) are $520,000







10. Projected payments for other operating expenses (other current liabilities) are $1,130,000

11. Projected depreciation expense is $55,000 and is already included in mfg overhead

Additional information that is available:

1. The expected tax rate is 35%







2. The company is planning a stock issue of $25,000

3. Income taxes are paid 3 months after the year-end

4. The company anticipates purchasing a new patent for $10,000 during the year.

5. WIP inventory is expected to decrease by $2,000

6. Finished goods inventory is expected to increase by $8,000

7. Due to insurance rate increases, it is expected that prepaid expenses will increase by $3,000

Investment information:

1. A purchase of additional equipment for $75,000 is expected on January 1^st.







2. The purchase will be made using $50,000 cash and long-term debt will be increased by $25,000

Long-Term Debt information:

1. All long-term debt will have an 8% annual rate.

2. A payment of $50,000 including BOTH  principle and interest will be made on December 31^st.

Required: Prepare a cost of goods manufactured schedule, a proforma income statement and proforma balance sheet.